The booming economy and manufacturing in China presented "many opportunities" for industrial property developers, said Chong Siak Ching, president and chief executive officer of Ascendas, Asia's leading industrial real estate developer.

Industrial parks

China's emerging business process outsourcing sector, and other IT services, Chong said, would create demand for industrial properties such as IT and technology parks.

The government's macro controls on the real estate market in recent years, which are mainly focused on residential housing, have also made industrial property development a lucrative new hot spot for developers and investors, analysts said.

Although the Ministry of Land and Resources already has policies regarding the supply of land and industrial property prices, local governments are much more relaxed about this aspect, said Zhou Jianchun, deputy director of the Institute of China Land Survey and also a member of the China Land Society.

"They (local governments) usually auction the land designated for industrial property development at much lower prices and always set loose limits on land supply in this regard, which has made the returns on industrial property development higher than other commercial property development activities," said Zhou.

In Shanghai, the rental yield from industrial property has reached 7.5 to 10 percent higher than the 6.5 to 9 percent achieved in commercial property rentals at the end of last March.

(China Daily 03/28/2007 page15)